Diemia Hospital has been considering the purchase of a new x-ray machine. The existing machine is operable for three more years and will have a zero disposal price. If the machine is disposed now, it may be sold for $170,000. The new machine will cost $700,000 and an additional cash investment in working capital of $115,000 will be required. The new machine will reduce the average amount of time required to take the x-rays and will allow an additional amount of business to be done at the hospital. The investment is expected to net $150,000 in additional cash inflows during the year of acquisition and $180,000 each additional year of use. The new machine has a three-year life, and zero disposal value. These cash flows will generally occur throughout the year and are recognized at the end of each year. Income taxes are not considered in this problem. The working capital investment will not be recovered at the end of the asset's life.
Required:
What is the net present value of the investment, assuming the required rate of return is 9%? Would the hospital want to purchase the new machine?
Answer:
1. Present value of cash-out flow = Purchase of new machine + Cost of working capital - Sale of old machine
Present value of cash-out flow = $700,000 + $115,000 - $170,000
Present value of cash-out flow = $645,000
Year Cash flow PVF 9% Net cash flow
1 $150,000 0.917 $137,550
2 $180,000 0.842 $151,560
3 $180,000 0.772 $138,960
4 $180,000 0.708 $127,440
5 $180,000 0.65 $117,000
Present value of Cash inflow $672,510
Present value of Cash outflow ($645,000)
Net present value $27,510
2. Yes, Hospital would want to purchase the new machine because the Net present value is positive.
A interest rate that changes based on the base rate used by the bank
A. Current
B. Fixed
C. High
D. Variable
Answer:
D
Explanation:
Use the information below to answer the following questions. Currency per U.S. $ Australia dollar 1.2377 6-months forward 1.2356 Japan Yen 100.3300 6-months forward 100.0500 U.K. Pound .6792 6-months forward .6781 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 5 percent. Use the approximate interest rate parity equation to answer the following questions. a. What must the six-month risk-free rate be in Australia
Answer:
Missing word "a. What must the six-month risk-free rate be in Japan"
a. Spot rate = 1 US $ = 1.2377 Aus.dollar
Forward rate = 1 US $ = 1.2356 Aus.dollar
1.2356 = (1 + i Ad)
1.2377 (1 + 0.05)
0.9983 * (1.05) = 1 + i.Ad
1.048215 = 1 + i.Ad
i.Ad = 1.048215 - 1
i.Ad = 0.048215
i.Ad = 4.82%
b. Spot rate = 1 US $ = 100.3300 Japan Yen
Forward rate = 1 US $ = 100.0500 Japan Yen
100.0500 = (1 + i Ad)
100.3300 (1 + 0.05)
0.9972 * (1.05) = 1 + i.Ad
1.04706 = 1 + i.Ad
i.Ad = 1.04706 - 1
i.Ad = 0.04706
i.Ad = 4.71%
Who collects income tax that is payable to the federal government?
Income tax that is payable to the federal government is collected by the
.
The income tax that is payable to the federal government is collected by the Internal Revenue Service.
What is Tax?When the government of a nation collects money from its residents as a tax, it is used to fund various aspects of the nation's growth, such as the construction of hospitals, roads, temples and transit systems,
Taxes on individual income, payroll, and corporate income are the three main ways that the federal government receives its revenue. Individuals' wages and salaries as well as investment and other income are subject to income taxes.
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QS 22-18C Joint cost allocation LO C3 A company purchases a 10,080-square-foot commercial building for $420,000 and spends an additional $72,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 2,880 square feet, will be rented for $1.50 per square foot. Unit B contains 7,200 square feet and will be rented for $0.90 per square foot. How much of the joint cost should be assigned to Unit B using the value basis of allocation
Answer:
$295,200
Explanation:
The computation of the joint cost that should be assigned to unit B is given below
But before that we have to determine the total and weightage
So, the total is
= 2,880 × $1.50 + 7,200 × $0.90
= $4,320 + $6,480
= $10,800
Now the weightage is
= $6,480 ÷ $10,800
= 60%
And, the joint cost is
= $420,000 + $72,000
= $492,000
So, the joint cost assigned to unit B is
= $492,000 × 60%
= $295,200
Jeannine is studying cultures and their respective attitude toward proxemics. What is she most likely to discover?
Question 5 options:
which cultures prefer having people stand close to one another
which cultures prefer to keep business interactions more formal
which cultures prefer to make eye contact when conversing
which cultures prefer all scheduled events to begin and end on time
Which cultures prefer having people stand close to one another attitude toward proxemics she is most likely to discover. Thus option A is correct.
What is culture?The term "culture" is a general one that refers to individual interaction, structures, and norms present in modern populations in addition to people that make up these communities as well as their skills, beliefs, including abilities.
Proxemics is the study of how people use space and how population size affects how they behave, communicate, and interact with others. the field of study that examines the distance that people feel they must maintain within themselves and others. Therefore, option A is the correct option.
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Horton Corporation is a 100 percent owned Canadian subsidiary of Cruller Corporation, a U.S. corporation. During the current year, Horton paid a dividend of C$600,000 to Cruller. The dividend qualifies for the 100 percent dividends received deduction. The dividend was subject to a withholding tax of C$30,000. Assume an exchange rate of C$1 = $1. Cruller reported U.S. source taxable income of $2,000,000 before considering the dividend received from Horton Corporation. Compute the tax consequences to Cruller as a result of this dividend.
A) Taxable income of $2,600,000, net U.S. tax of $516,000, and FTC carryover of $0.
B) Taxable income of $2,600,000, net U.S. tax of $546,000, and FTC carryover of $30,000.
C) Taxable income of $2,000,000, net U.S. tax of $390,000, and FTC carryover of $0.
D) Taxable income of $2,000,000, net U.S. tax of $420,000, and FTC carryover of $0
Answer:
D) Taxable income of $2,000,000, net U.S. tax of $420,000, and FTC carryover of $0
Explanation:
Computation for the tax consequences to Cruller as a result of this dividend
The tax consequences will be Taxable income of the amount of $2,000,000, net U.S. tax of the amount of $420,000 Calculated as ($2,000,000 × 21%) and FTC carryover of $0 reason been that withholding tax won't be creditable based on the fact that the withholding tax was been imposed on a dividend that is eligible for the 100% dividends deduction that was received.
Which of the following statements is TRUE with regard to the use of a plantwide predetermined overhead rate (PPOHR) compared to the use of individual departmental predetermined overhead rates (DPOHRs)?
a. PPOHRs are based on outdated activity and will never be accurate for application of overhead.
b. PPOHRs are often simplistic and do not account for the best cost driver for each department.
c. DPOHRs are better for estimating costs across departments when the same allocation base is used.
d. DPOHRs are often allocated based on estimated activity for each job.
Answer:
c. DPOHRs are better for estimating costs across departments when the same allocation base is used.
Explanation:
In the case when the predetermined overhead rate of plantwide would be compared with the predetermined overhead rate of the individual department so the predetermined overhead rate of the individual department would be considered better for predicting the cost at the time when similar allocation base should be applied
Therefore the option c is correct
If Joey joins the military, he can learn different skills that could be useful in his later career.
A.
True
B.
False
Answer:
The answer is A. This statement is true.
Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $170000 and credit sales are $1710000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Cheyenne Corp. make if the Allowance for Doubtful Accounts has a credit balance of $3400 before adjustment? Bad Debt Expense 8500 Allowance for Doubtful Accounts 8500 Bad Debt Expense 5100 Accounts Receivable 5100 Bad Debt Expense 5100 Allowance for Doubtful Accounts 5100 Bad Debt Expense 8500 Accounts Receivable 8500
Answer:
See below
Explanation:
Given the above information, the adjusting entry for Chynne will be;
The general ledger is:
used to sort, store and summarize a company's transactions and part of the
accounting cycle
used to sort, store and summarize a company's transactions
used to make adjusting entries
part of the accounting cycle
Answer:
used to sort, store and summarize a company's transactions.
Explanation:
Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, account payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB).
Thus, it is a field of accounting involving specific processes such as recording, summarizing, analysis and reporting of financial transactions with respect to business operations over a specific period of time.
A general journal is used for initially recording a transaction before it's then subsequently transferred or posted to the general ledger. In Financial accounting, this process of transferring information about a transaction from the general journal to the general ledger is known as posting.
Furthermore, the main purpose of a general ledger is to list all accounts used in recording an organization's transactions and as such it contains a list of transactions affecting each account and the account's balance.
Hence, the general ledger is used to sort, store and summarize a company's transactions.
The Power Tool Division of ABC Hardware sells one product, Jig Saw, and has the following data for the second quarter: Units of output 1,200 units Price per unit $ 150 Variable cost per unit 90 Total fixed costs 48,000 Required: Determine the following: 1. Quarterly operating profit when 1,200 units are sold. 2. Break-even volume in units. 3. Contribution margin ratio. 4. Break-even volume in sales dollars. 5. Sales dollars and units needed to generate an operating profit of $57,000. 6. Number of units sold that would produce an operating profit of 15% of sales dollars. 7.
Answer:
Results are below.
Explanation:
A)
We need to determine the profit when 1,200 units are sold:
Operating profit= total contribution margin - fixed costs
Operating profit= 1,200*(150 - 90) - 48,000
Operating profit= $24,000
B)
To calculate the break-even point in units, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 48,000 / (150 - 90)
Break-even point in units= 800 units
C)
Now, the contribution margin ratio:
Contribution margin ratio= (150 - 90) / 150
ontribution margin ratio= 0.4
D)
To calculate the break-even point in dollars, we need to use the following formulas:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 48,000/0.4
Break-even point (dollars)= $120,000
E)
Desired profit= $57,000
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (48,000 + 57,000) / 60
Break-even point in units= 1,750
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= 105,000 / 0.4
Break-even point (dollars)= $262,500
F)
Desired profit= 15%
Number of units to be sold= Break-even point*1.15
Number of units to be sold= 800*1.15
Number of units to be sold= 920
Which of the following activities might you consider adding a time buffer to? Activities with scarce resources Activities with severe risks Merge activities that are prone to delays Noncritical activities with very little slack You might consider adding a time buffer to any of these activities.
Answer:
You might consider adding a time buffer to any of these activities.
Explanation:
Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.
Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.
Furthermore, the main purpose of project management is working toward a common goal.
This ultimately implies that, project managers should ensure adequate attention and time is taken to identify, analyze and manage capital, raw materials, people, system of tasks and other resources, so as to effectively and efficiently achieve a common goal with all project stakeholders.
A time buffer also referred to as slacks or lag can be defined as the additional amount of time added to a project in order to keep it on track and/or flexible.
Generally, in the execution of a project, when a task is delayed it normally affects the start or finishing time of the other tasks (successors) in a project. The amount of time that is permitted for an activity to be delayed without delaying the early start date of any immediately following (succeeding) activities refers to free slack, which is capable of having an adverse effect on entire project.
A project manager might consider adding a time buffer to any of the following activities;
I. Activities with scarce resources.
II. Activities with severe risks.
III. Merge activities that are prone to delays.
IV. Noncritical activities with very little slack.
3. Lily is an accountant at Strawn and Simpson. She has done an excellent job and has received a number of promotions and raises over the years. Lily is diagnosed with cancer and tells Strawn and Simpson that she will need to arrive at work an hour late twice a week for a period of three months when she undergoes medical treatments. She offers to make up the work either by staying later, coming in over the weekend or working at home. Lily is immediately fired. What rights does Lily have against Strawn and Simpson
Answer: Protected by the Family and Medical Leave Act (FM-LA).
Explanation:
The FM-LA protects her from this action by Strawn and Simpson as it states that Lily should be allowed to take leaves for a serious medical condition.
The FM-LA considers cancer a serious medical condition and has a provision for instances where the employee can miss periods of work to take treatments provided that they disclose this to their employers.
The employees are allowed to break the maximum period of 12 periods leave per year into blocks such as daily and hourly. Lily is therefore allowed by law to seek what she was seeking from the company and so she can file a complaint with the Department of Labor under this Act to seek redress.
The management of Truelove Corporation is considering a project that would require an initial investment of $349,000 and would last for 7 years. The annual net operating income from the project would be $29,400, including depreciation of $45,800. At the end of the project, the scrap value of the project's assets would be $28,400. (Ignore income taxes.) Required: Determine the payback period of the project. (Round your answer to 2 decimal places.)
Answer:
4.64 years
Explanation:
The computation of the payback period is given below;
We know that
Payback period = Investment required ÷ Net annual cash inflow
where,
Net annual cash inflow is
= $29,400 + $45,800
= $75,200
Now the Payback period is
= $349,000 ÷ $75,200
= 4.64 years
hence, the payback period of the project is 4.64 years
On January 1, 2017, Chamberlain Corporation pays $503,200 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $19,800 results from the acquisition. On December 31, 2018, Neville reports revenues of $460,000 and expenses of $328,000 and Chamberlain reports revenues of $784,000 and expenses of $440,000. The parent figures contain no income from the subsidiary. What is consolidated net income attributable to Chamberlain Corporation
Answer:
Explanation:
Calculation to determine consolidated net income attributable to Chamberlain Corporation
Using this formula
Consolidated net income attributable to Chamberlain Corporation=[(Neville Revenues-Neville Expenses)+(Chamberlain Revenues-Chamberlain Expenses)- Annual excess fair-value amortization]-[(Neville Revenues-Neville Expenses)-Annual excess fair-value amortization*percentage of ownership in Neville.
Let plug in the formula
Consolidated net income attributable to Chamberlain Corporation=[($460,000-$328,000)+($784,000-$440,000)-$19,800]-[($460,000-$328,000)-$19,800*40%]
Consolidated net income attributable to Chamberlain Corporation=($132,000+$344,000-$19,800)-($132,000-$7,920)
Gonzales Company declared and distributed a 10% stock dividend when it had 800,000 shares of $1 par value common stock outstanding. The market price per share of common stock was $60 per share when the dividend was declared. The journal entry to record the stock dividend would include a credit to:__________.
a. Common Stock $800,000.
b. Stock Dividends $1,200,000.
c. Additional Paid-in Capital -Common $4.720,000.
d. Retained Earnings $800,000.
Answer: C. Additional Paid-in Capital -Common $4.720,000.
Explanation:
Based on the information given in the question, the journal entry to record the stock dividend would go thus:
Debit: Retained earnings = 80000 × $60 = $4,800,000
Credit: Common stock = 80000 × $1 = $80000
Credit: Additional paid in capital- Common stock = 80,000 × $59 = $4,720,000
(To record share dividend)
Therefore, the journal entry to record the stock dividend would include a credit to Additional Paid-in Capital -Common $4.720,000
Consider the recorded transactions below.
1. Accounts Receivable
Service Revenue
2. Supplies
Accounts Payable
3. Cash
Accounts Receivable
4. Advertising Expense
Cash
5. Accounts Payable
Cash
6. Cash
Deferred Revenue
Beg. bal
End bal.
Debit
Cash
8,800
1,600
8,800
1,100
2,300
1,200
Credit
8,800
1,600
8,800
1,100
Required:
Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before
the transactions is: Cash, $2,000; Accounts Receivable, $2,800; Supplies, $260; Accounts Payable, $2,100; Deferred Revenue, $160.
Service Revenue and Advertising Expense each have a beginning balance of zero.
The beginning balance of each account before the transactions is: Cash, $3,400; Accounts Receivable,$4,200; Supplies, $400; Accounts Payable,$3,500; Deferred Revenue, $300. Service Revenue and Advertising Expense each have a beginning balance of zero.
What are Transactions?An executed contract between a buyer and a seller to trade goods, services, or financial assets in exchange for money is known as a transaction.
The phrase is also frequently used in business accounting. This straightforward definition might be challenging in corporate bookkeeping.
Depending on whether a corporation utilizes accrual accounting or cash accounting, it may record a transaction sooner or later.
Therefore, The beginning balance of each account before the transactions is: Cash, $3,400; Accounts Receivable,$4,200; Supplies, $400; Accounts Payable,$3,500; Deferred Revenue, $300. Service Revenue and Advertising Expense each have a beginning balance of zero.
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Federal Rent-a-Car is putting together a new fleet. It is considering package offers from three car manufacturers. Fred Motors is offering 5 small cars, 5 medium cars, and 10 large cars for $500,000. Admiral Motors is offering 5 small, 10 medium, and 5 large cars for $400,000. Chrysalis is offering 10 small, 5 medium, and 5 large cars for $300,000. Federal would like to buy at least 550 small cars, at least 500 medium cars, and at least 550 large cars. How many packages should it buy from each car maker to keep the total cost as small as possible
Answer:
a) X ( number of package bought from Fred motors ) = 30
Y ( number of package bought from Admiral ) = 20
Z ( number of package bought from Chrysalis ) = 30
b) The smallest total cost = $32,000,000
Explanation:
Given data :
cars types x y z quantity needed
small 5 5 10 550
medium 5 10 5 500
large 10 5 5 550
cost $500,000 $400,000 $300,000
Note : x = number of package bought from Fred motors , y = Admiral motors , z = Chrysalis motors
The number of packages to be bought from each car manufacturer to keep total cost as small as possible
X ( number of package bought from Fred motors ) = 30
Y ( number of package bought from Admiral ) = 20
Z ( number of package bought from Chrysalis ) = 30
The smallest total cost = ( 30 * 500,000 ) + ( 20*400,000) + (30*300,000 )
= $32,000,000
Attached below is the detailed solution
An MNC considers establishing a two-year project in New Zealand with a $30 million initial investment. The firm's cost of capital is 12 percent. The required rate of return on this project is 18 percent. The project is expected to generate cash flows of NZ$12 million in Year 1 and NZ$30 million in Year 2, excluding the salvage value. Assume no taxes and a stable exchange rate of $.60 per NZ$ over the next two years. All cash flows are remitted to the parent. What is the break-even salvage value
Answer:
NZ$25 million
Explanation:
Assuming salvage value = X
Cash flow in year 1 = 12 million*0.60 = $7.2 million
Cash flow in year 2 = 30 million*0.60 = $18 million
Note: At break-even salvage value, Net Present Value = 0
So, Initial cost = Present value of inflow (Sum of inflow*PV factor)
Initial cost = 7.2(PV 18%, 1 year) + 18(PV 18%, 2 years) + X(PV 18%, 2 years)
30 = 7.2*0.847 + 18*0.718 + X*0.718
30 = 19.02 + X*0.718
X*0.718 = 30 - 19.02
X*0.718 = 10.98
X = 10.98/0.718
X = 15.292479
X = $15.29
Stable exchange rate of $.60 per NZ$ over the next two years.
Break-even salvage value = 15.29/0.60
Break-even salvage value = NZ$25.4833
Break-even salvage value = NZ$25 million
If a firm is operating at a point on its long-run average total cost curve where the slope is negative, it
is
O experiencing increasing returns to scale
O experiencing constant returns to scale
O experiencing decreasing returns to scale
O achieving efficient scale
O
making progressively less as it increases its inputs
A company is enjoying growing returns to scale if it is performing at a position on its long-run total cost average curve at which slope is negative.
What in business is the firm?A partnership is a for-profit enterprise that often takes the form of a partnership and offers professional services like accountancy or legal counsel. According to the philosophy of the firm, places operate to maximize profits.
Why does "firm" signify "company"?The phrase "business house" first appeared there in English language in 1744, according to an International Etymology Dictionary. It is said to have originated from the German term Firma, which meant "a firm, name of either a firm" and was derived as from Italian words Firma, which meant "signature," and Firmare, which meant "to sign."
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EcoMotors’s disclosure notes for the year ending December 31, 2017, included the following regarding its $0.001 par common stock: Employee Stock Purchase Plan Our employees are eligible to purchase our common stock through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The purchase price would be 85% of the lower of the fair market value on the first and last trading days of each six-month offering period. During the years ended December 31, 2017, 2016, and 2015, we issued 221,071, 164,100 and 221,071 shares under the ESPP for $38.0 million, $29.1 million and $14.3 million, respectively. There were 3,620,749 shares available for issuance under the ESPP as of December 31, 2017. Required: Prepare the journal entry that summarizes EcoMotors’s employee share purchases for the year ending December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Answer:
Date General journal Debit Credit
Dec 31, 2017 Cash $38,000,000
Compensation expense $6,705,882
[($38,000,000/85%)*15%]
Common stock [221,071 * $0.001] $221
Paid in capital - in excess of par $44,705,661
Many times, margin, instead of retailing price, becomes the firm's decision variable. Suppose we notice Kroger is selling Dove at $0.99 per bar. We also know the manufacturing cost of Dove by its producer, Unilever, is $0.6 per bar, and the manufacturer's margin is 40%. Based on the cost plus pricing formula we discussed in class [ P=C+m%*C], we could figure out Kroger's margin on
Dove is about _______.
a. 18%
b. 25%
c. 38%
d. 65%
Little oil has outstanding 1 million shares with a total market value of 26 million. The firm is expected to pay 1.00 million of dividends next year, and thereafter, the amount paid out is expected to grow by 5% a year in perpetuity. Thus, the expected dividend is 1.05 million in year 2, 1.1025 million in year 3, and so on. However, the company has heard that the value of a share depends on the flow of dividends, and therefore it announces that next year’s dividend will be increased to $2 million and that the extra cash will be raised immediately by an issue of shares. After that, the total amount paid out each year will be as previously forecasted, that is, $1.05 million in year 2 and increasing by 5 percent in each subsequent year.
(a) At what price will the new shares be issued in year 1?
(b) How many shares will the firm need to issue?
(c) What will be the expected dividend payments on these new shares, and what therefore will be paid out to the old shareholders after year 1?
Answer:
a) $26
b) 1,038,462 shares
c) i) 0.037 , ii) 0.963
Explanation:
Total market value = 26 million
a) Determine the price at which the new shares will be issued in year 1
number of shares issued after year 1 = ( 1,000,000 + x )
x = new shares
p = price of new share
Total value of firm = Total market value + Dividend payment
= $26 million + $1 million = $27 million
p = Total value / x = 27 million / x ----- ( 1 )
also : x * ( p ) = $1,000,000
back to equation 1
P = $27,000,000 / ( 1,000,000 + x )
p ( 1,000,000 + x ) = $27,000,000
∴ ( 1,000,000 * P ) + 1,000,000 = $27,000,000
hence P = $26,000,000 / 1,000,000
price at which share new share will be issued = $26
b) Determine the number of shares the firm will issue
P( 1,000,000 + x ) = $27,000,000
= 26 ( 1,000,000 + x ) = $27,000,000
x = ( 27,000,000 / 26 ) - 1,000,000
number of shares ≈ 38462
Number of new shares that the firm will need to issue
= ( 1,000,000 + 38462 ) = 1,038,462 shares
c) Determine the expected dividend payments on these new shares and
dividend payment on new shares = New shares / Total outstanding shares
= 38462 / 1,038,462 = 0.037
dividend payment to old shareholder = 1 - 0.037
= 0.963
Robert believes that entrepreneurship will help you in other aspects of your life. What do you think?
Limitations of direction
Answer:
Explanation: Managament techniques should be adjusted according to specific circumstances.
one techniques maybe good in one situation but maybe not good in other situation.
principles of management are not static in nature.
management is concerned with the human element in an organization.
Communication which occurs via small
group discussion would fall under which
category?
A. synchronous
C. horizontal
B. a synchronous
D. vertical
Answer: A. synchronous
Explanation: Communication that occurs via small group discussion would fall under the category of synchronous communication. Synchronous communication refers to a type of communication that occurs in real-time, such as a conversation or a meeting. It involves people interacting with each other at the same time, rather than asynchronously, where people communicate at different times.
Do you think ethics is become more or less important in business? Explain it. What is the difference between Ethical Relativism and Ethical absolutism. Explain it by your own words with example
hics has always been an important aspect of business, but in recent years, its significance has been further highlighted by a growing number of high-profile corporate scandals and increased public scrutiny of corporate behavior. As such, many businesses and organizations are placing a greater emphasis on ethical practices and decision-making.
One of the key reasons for this increased emphasis on ethics is the recognition that ethical behavior is not only the right thing to do, but it also has a positive impact on a company's bottom line. Ethical practices can lead to improved employee morale and productivity, increased customer loyalty, and a better reputation in the community. Additionally, businesses that prioritize ethics are less likely to face legal or financial penalties for unethical behavior.
On the other hand, ethical absolutism and ethical relativism are two theories that help to explain the perspective of ethics.
Ethical absolutism is the belief that there are certain moral rules that are universally and always right or wrong, regardless of the situation or the person's culture. For example, an ethical absolutist would say that it is always wrong to lie, cheat, or steal. This theory holds that there is an objective, universal standard of morality that applies to everyone.
On the other hand, Ethical relativism holds that morality is relative to the individual or the culture, and what is considered right or wrong can vary from person to person or culture to culture. The ethical relativist would argue that lying, cheating, or stealing could be morally acceptable in certain situations or cultures. For example, a relativist would say that something that is considered right in one culture may not be right in another culture.
In conclusion, businesses and organizations are increasingly recognizing the importance of ethics, both from a moral and a business perspective. Ethical absolutism and ethical relativism are theories that help to explain different perspectives on ethics, with the former holding that there are objective moral standards that apply to everyone and the latter believing that morality is relative to individual or culture.
You are provided with the following information for Najera Inc. for the month ended June 30, 2017. Najera uses the periodic method for inventory.
Date Description Quantity Unit Cost or Selling Price
June1 Beginning inventory 38 $42
June4 Purchase 135 $46
June10 Sale 108 $70
June11 Sale return 12 $70
June18 Purchase 58 $48
June18 Purchase return 9 $48
June25 Sale 64 $75
June28 Purchase 33 $52
Required:
Calculate cost per unit.
Answer:
$46.56
Explanation:
Calculation to determine the cost per unit.
Units Units Cost Total cost
June1 Beginning inventory 38* $42 =$1,596
June4 Purchase 135 *$46=$6,210
June18 Purchase 58 *$48=$2,784
June18 Purchase return (9) *$48=($432)
June28 Purchase 33 *$52=$1,716
Total= 255 $11,874
Now let calculate the cost per unit using this formula
Weighted average cost per unit=Costs of goods sold for sale/Units available for sales
Let plug in the formula
Weighted average cost per unit=$11,874/255
Weighted average cost per unit=$46.56
Therefore the cost per unit is $46.56
You are International Business Manager at a UK based company. Your company has identified USA and Europe as potential markets and wish to expand asap and plans a full-scale expansion. You are requested to analyse both projects and advise.
In considering such large project, you must work out the risk of each project, cost of capital and NPV. Allocate discount rate for each project according to current international business climate and justify why you allocated the discount rate for each region. Discuss how you aim to manage international risks.
Projected cash flows in respective currencies:
Year Net Cash Flow – USA USD Net Cash Flow - Europe EUR
0 -20 million -20 million
1 2 million 2 million
2 4 million 3 million
3 5 million 4 million
4 6 million 8 million
5 8 million 8 million
Instructions:
a. Briefly discuss viability of both projects in today’s global business context. Based on your discussion allocate and justify discount rate for both projects. (30 Marks)
b. How much investment (GBP) is needed for each project and what is the NPV of each project? Use spot and forward exchange rates to discuss. (30 Marks)
c. Considering current world economic climate, the future exchange rates are uncertain. How would you analyse/anticipate the change in exchange rates? Write a brief proposal to mitigate impact of possible exchange rate fluctuations (30 Marks)
d. Discuss your calculations and advise which project should be selected. (10 Marks)
Answer:
a. In order to determine the viability of these projects and allocate the appropriate discount rate, it is necessary to consider the current global business context. This includes factors such as economic conditions, political stability, competition, and other risks specific to each region.
Based on this analysis, the USA project may be considered more viable due to its larger market size and generally more stable economic and political environment compared to Europe. However, the European project may offer potential for growth in certain sectors, such as technology or green energy.
In terms of discount rates, it would be appropriate to allocate a higher rate for the European project due to the greater inherent risks associated with expanding into this region. The discount rate for the USA project could be lower, reflecting the lower perceived risk.
b. In order to calculate the amount of investment needed for each project and the corresponding NPV, we will need to convert the projected cash flows into GBP using the current spot exchange rate. For example, if the spot exchange rate for USD is 1.30 GBP and the spot exchange rate for EUR is 1.20 GBP, the investment needed for the USA project would be £20 million and the investment needed for the European project would be £20 million.
Using a discount rate of, say, 10% for the USA project and 15% for the European project, we can then calculate the NPV of each project as follows:
USA project:
NPV = -£20 million + (£2 million / 1.1) + (£4 million / (1.1^2)) + (£5 million / (1.1^3)) + (£6 million / (1.1^4)) + (£8 million / (1.1^5))
= £2.8 million
European project:
NPV = -£20 million + (£2 million / 1.15) + (£3 million / (1.15^2)) + (£4 million / (1.15^3)) + (£8 million / (1.15^4)) + (£8 million / (1.15^5))
= £2.2 million
c. In order to anticipate and mitigate the impact of exchange rate fluctuations on these projects, it may be advisable to use forward exchange contracts to lock in a specific exchange rate for a future date. This can help to reduce uncertainty and protect against potential losses due to unfavorable movement in the exchange rate.
Additionally, it may be helpful to diversify the currency exposure of the projects by investing in a range of currencies or using currency hedging strategies. This can help to reduce the overall risk associated with exchange rate fluctuations.
d. Based on the calculations above, it appears that the USA project may offer a higher NPV and therefore may be the more attractive option. However, it is important to consider all factors when making this decision, including the specific risks and opportunities associated with each region, as well as the company's overall goals and resources.